Aegon Religare iMaximize ULIP : Review

Aegon Religare has come up with a new Unit Linked Insurance Policy called iMaximize. This policy comes without any premium allocation charges. That makes iMaximize a unique and thus the most cost efficient insurance plans. For those who look for both insurance and investment opportunity in a single plan, this plan stands out of the rest because of its key features. As always, Aegon Religare is offering this plan through online mode which adds to the convenience of its customers.

On the outlook this seem to be a great ULIP with very low level of overall charges. If you are considering an investment plan with insurance as add on, this is one of the best options available in the current market. Let us take a look at some of the key features of Aegon Religare iMaximize plan:

ZERO premium allocation charges – full premium money will be invested

Upfront information about the mortality rates and fund management charges which remain constant throughout the policy tenure

Choice of two death benefits for policies under regular premium

Top-ups do not attract any premium allocation charges as well

Special units get added from the 12th year onwards till the maturity of the policy – Units equal to 0.45% of the average fund value in the last 12 months get added.

Choice of two investment strategies depending on policy holders preference

Maturity Benefit – The policy holder would get the fund value of the iMaximize Plan.

Income Tax Benefit – Life Insurance premiums paid up to Rs.1,00,000 are allowed as a deduction from the taxable income each year under section 80C. The maturity amount you receive from this plan are exempt from tax u/s 10(10D)

Investment Strategies – iMaximize Plan has 2 options – one can change the strategy at any point of the policy term.

Trigger Portfolio Strategy – here premiums are invested in the accelerator fund (which is an aggressive equity oriented fund) & as soon as the fund value equals 110% of the premium paid till date, the extra amount is moved to the secure fund (which is a conservative debt oriented fund). Due to this strategy, one can participate in aggressive fund and secure any surplus generated by it.

Self Managed Portfolio Strategy – In this you choose between the 3 funds which are available – Secure Fund, Stable Fund & Accelerator Fund.

Topup – Policy holder can add any amount to existing funds at any time after the 1st policy year and before the last 5 policy years. The minimum amount of topup should be Rs.10,000.

Switching – There exists a flexibility to switch investments from one fund to the other any time during the policy term. There are 4 free switches in each policy year.

Premium Redirection – The plan comes with a facility to redirect all future premiums to the funds of policy holder’s choice.

Partial Withdrawal – Policy holder’s are allowed to make partial withdrawals after completing 5 years. But the limit to withdraw is only 20% of the fund value at the beginning of that policy year.

Illustration of benefits with example:

Triple Protection: Mr. X is 45 years Old and has a wife and a daughter aged 10 years. He took AEGON Religare iMaximize Plan with triple protection which offers Sum assured + Family Income Benefit + Premium Continuance Benefit. Premium paid by Mr. X is Rs. 50,000 per annum and policy term is 20 years with Sum Assured of Rs.15 lakhs. Unfortunately at the end of the 3rd year Mr. X dies due to heart attack. What does Mr. X’s nominee get?

Mr. X’s nominee gets all of the below:

Sum assured of Rs. 15 lakhs immediately + Rs. 50,000 as payout for Family income benefit per year for the next 17 years +

The policy will continue as usual and Aegon Religare will pay premium of Rs. 50,000 on behalf of Mr. X for the next 17 years. At maturity Mr. X’s nominee will receive the fund value as on the maturity date.

Profit Booking: Mr. X invests Rs. 50,000 as annual premium and chose Trigger portfolio strategy to manage his finds. Lets say in 8 months time the fund manager manages to earn him a good return and his fund value reaches 55,000. Now this additional Rs. 5,000 (which is 10% of his invested amount) will be shifted to Secure fund so that his gains are secured and the capital of 50,000 will remain invested in the market to generate more returns. This check is carried out on a daily basis to ensure that Mr. X’s gains from the fund are secure, giving him complete peace of mind.

Complete information on iMaximize ULIP and related documentation can be found here on the Aegon Religare Life Insurance website. The details provided above are derived out of the policy document available on their site as on the publishing date of this article.

What a blog you have here..& quite a following, I must say. Request your comments on my selection of Mutual Funds for SIP investment, starting Dec 2011 onwards. Please suggest if the funds I have shortlisted for SIP are good enough or not recommended…

Your views are correct that insurance and investment shouldn’t be mixed, but this view was formed because of the highly loaded traditional and ULIP products which paid out huge commissions to agents. In a product like iMAXIMIZE the entire amount is invested on behalf of the customers as there are 0% allocation charges. Since this is an online product like iTERM, there are no agents involved and hence no commissions to be paid and so the benefit is passed on to the customers. Also can any other inbvestment product ever guarantee you a cover of 30 times your premium + your premium amount paid to your family for the next 15/20/25 years + the policy continuing for the nest 15/20/25 years and your family getting this fund value at the end of it? And all this with additional feature of Secured gains which transfers your Profits to a secure fund so that if the markets go down, your profits still remian safe.

Overall this is aplan wherein the Customer is the focus and the centre of focus.

Sourav, I think you are misplaced in thinking that the only reason why investment and insurance should not be mixed are the heavy frontloaded charges by insurance companies on ULIPS. There are 2 reasons as to why ULIPS are bought, namely (a) tax advantage and (b) because of the high commission insurance company can build a sales force to push ULIPS to uninformed customers (which sadly the MF’s can’t afford now). The first one seems fair but the second is not. Any sound financial planner will tell you to buy a term plan (the same company has a great online term plan) and invest in mutual funds. Again for 2 reasons (a) if investment is my primary concern then why should I pay mortality charges and admin charges, you would agree that MF’s are far cheaper. (b) I have my doubts if insurance companies are outperforming their MF peer in terms of returns. So to summaries I think tax advantage is the universal USP for ULIPS and for this particular one its only better when compared to other ULIPS and not when compared with all investment options available to potential customers I wish our population was more active and informed in managing their money opposed to passive and act as a herd. Love to hear your view. Cheers! Neelam

Informative writeup. But one should also consider the fact that once DTC comes into force in 2012, Insurance policies that have a premium:cover ration of less than 1:20 would not come under 80C. I understand that this particular policy has 1:30 cover, but still investors should be aware of this fact.

In response to your comment – IMAXIMIZE is also an ONLINE ULIP just iTERM which is also an online plan. Thus there are no middlemen or agents. As such, there are no hefty commissions built in the product and the reaosn why the company offers 100% allocation and no charges. If you do not want to pay mortality charges then you do not need to take a high sum assured. Even a mutual fund charges 2.25% fee, whereas this product charges 1.35% but it offers a major feature which no mutual fund offers, this is triple protection. To explain in eg: Mr. A is a married man, with a wife and daughter. He invests 50,000 p.a. in both a MF plan and 50,000 in iMAXIMIZE. In a road accident Mr. A passes away after paying the 1st Premium/installment for both MF and iMAXIMIZE ULIP. What does his family get? The fund value in case of MF. In the case of iMAXIMIZE his family gets the S.A which is 5 lakhs imemdiately + 50,000 for next 20 years + the policy continues as the company pays premium on behalf of the policy holder and at the end of the 20th year his family again gets the fund value of the investments. So now Neelam, tell me is there any other investments which provides there 3 benefits along with zero allocation charge. All products have their unique advantages but online products are always cheaper due to lack of middleman and hence the customer is key beneficiary.

Hi, The plan looks very good; however Choice of available investment funds is limited. It will be good to start of with a single premium for current financial year and then one can change the next upcoming year’s investment amount and required Sum Assured (to get Max Tax benefit , if Govt decides to impliment new direct tax codes) by means of Top -Up premiums.

Intresting.. I have actually been keeping a watch on the market, seems like its on its major low. Hence I have a reservation on invisting on a Unit linked plan. All MF that I have invested the fund value is actually lower than my actual investment